AfriNET IT Solutions |External Environment
Analysis

2.1
EXTERNAL
ENVIRONMENT
ANALYSIS

This includes an analysis of the Political, Economic,
Social,
Technological, Legislative and Environmental changes
taking place. The
analysis outlooks as to whether these will be
opportunities or threats
to the business.

Political
Changes

The
South African Government has set up a number
of small business support
initiatives through the Department of Trade
and Industry; these
include: Small Enterprise Development Agency
(SEDA) and the National
Youth Development Agency NYDA (previously
known as Umsobomvu Youth
Fund). These are aimed at promoting small,
micro and medium businesses.
The agencies will be an opportunity for the
business as it will have
access to support in terms of assistance with
the development of a
comprehensive marketing strategy and plan,
financial and accounting
systems, branding and so forth. There is also
support in terms of
skills development and training as a result of
the establishment of
Sector Education and Training Authority
(SETA). South Africa has looked
at various policies and initiatives aimed at
growth, empowerment,
procurement and other factors. Key
opportunities will include:

Broad Based Black Economic Empowerment

This
is
essentially
a
policy
that
focuses
on
growth
and
helping
South
Africa
realise
its
full
economic
potential
while
taking into account
employment equity. It will be an opportunity
for the business.

Industry Charters – ICT Charters

Industry
Charters
such
as
the
ICT
Empowerment
Charter
will
also
be
an
opportunity
for
the
business.
It
comprises
of
Broadcasting Electronics,
IT and Telecommunications sub-sectors and
looks into aspects such as
preferential procurement, Skills Development,
Employment Equity,
Management and Control, Equity Ownership and
other factors within the
ICT context.

Other developments in term political changes
that will be an
opportunity to AfriNET IT Solutions include:
Affirmative Procurement,
Local Economic Development, Accelerated and
Shared Growth Initiative
for South Africa and the Integrated
Development Plans.

Economic
Changes

There
are
a
number
of
economic
changes
taking
place
in
South
Africa.
The
economic
slowdown
has
had
an
adverse
effect
on the economy of South
Africa as evident from the declines in
manufacturing, mining,
agricultural and other sectors. The resulting
unemployment has resulted
in reduced numbers of people with buying
potential and hence an adverse
impact on existing and potential businesses. The
recession has led to
the tightening of budgets by public and private
institutions.
Individuals have also been noted to not easily
part away with their
hard earned money. On a positive note, this year
has seen the fall of
interest rates and this is sure to be an
opportunity for the business
as its conception and realisation will depend on
borrowed funds.
Borrowed funds attract interest as a cost and
therefore if the interest
rates are low then the cost of borrowed funds is
less. Inflation
is at an average of about 7%, rising prices
continue to have a negative
effect on the economy. However, this is likely
to increase as there is
potential for Eskom to increase the electricity
prices by 45% thus
posing threat to the business.

Social
Changes

South Africa
has a
relatively high crime rate and this is likely
to be a threat for the
business as it will be forced to incur
expenditure on security
instruments and gadgets such as alarm systems,
burglar bars and lock
systems. The current socials ills in the
country and indeed the rest of
the world may also pose threat on the life
cycle of employees in the
business. This includes social ills such as
Aids/ HIV pandemic and the
surfacing incidence of the Swine flu.

On a positive note the IDP applicable to
Gauteng region looks into the
development of more social centers and a
majority of these are to be
integrated with Information Technology
advancements. The growing
population coupled with the growth in double
income families will be an
opportunity for the business.

Technological
Changes

Technological
changes
taking
place
will
be
an
opportunity
to
the
business
as
it
will
have
access
to
the
latest
Information
Technology computer diagnosis
software, networking platforms, devices and much
more. The momentum
gained by open source software could provide the
business with free
software that is capable of producing advanced
websites and promotional
material to mention a few uses. With signs of
cellular phone network
prices declining, the business could be open to
capitalise on low
priced mobile internet options. The
business will be open to
internet marketing and e-commerce opportunities
which will expand the
market for it.

Environmental
Changes

A
key
opportunity
emanating
from
environment
changes
is
the
movement
towards
electronic
waste
recycling.
eWASA
–
e Waste Association of
South Africa is an electronic waste association
in South Africa. It is
a platform aimed at driving the recycling of
electrical and electronic
waste. The business can support this drive as a
lot of faulty parts
from clients computers will be kept for
disposal. These could simply be
put in the pipeline for recycling as e-waste. An
additional stream of
income could be generated as a result.

Legislative
Changes

The
business
will
have
to
comply
with
the
laws
of
the
Republic
of
South
Africa.
There
is a threat of the business not being fully able
to
comply with laws and regulations.
Particular attention will
have to be placed on complying with anti piracy
laws and Information
and Communications Technology Laws. The
Information and Communication
Technology law addresses and focuses on the
legal risks posed by
information technology, information security and
management. The
business will have to observe the following acts
amongst others: